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Prospect for a Free Trade Agreement (FTA) between Sri Lanka and Japan has come under discussion at bilateral level

Prospect for a Free Trade Agreement (FTA) between Sri Lanka and Japan has come under discussion at bilateral level.

5 June 2011

Given the strong economic, political and cultural ties shared by the two countries an FTA to further bolster bilateral trade had been a topic during a meeting between Japanese Ambassador Kunio Takahashi and Minister of Industry and Commerce Rishad Bathiudeen.

Ambassador Takahashi acknowledged the idea that an FTA with Japan will help Sri Lanka contribute to Lanka-Japan bilateral trade dialogue, the Ministry said yesterday.

Bilateral trade between Japan and Sri Lanka had grown to $ 753 million last year from $ 493 million in 2002.

During the meeting Minister Bathiudeen extended an open invitation for Japanese businesses to enhance trade and investors to harness emerging opportunities without delay.

The historic bilateral cooperation between Japan and Sri Lanka is well known and as Sri Lanka steps into a new era of development, I extend my invitation to the Japanese investors who are looking for opportunities to relocate their industries to Sri Lanka, and request them to exploit the emerging opportunities without delay, Minister Bathiudeen stated.

Inviting more Japanese investments to Sri Lanka, Bathiudeen stressed: Sri Lanka also continues to take part in major trade fairs held in Japan and in 2009 Sri Lanka took part in the International Jewellery Tokyo (IJT), the Supermarket Trade Show, FOODEX Japan, West Japan Import Fair, Japan Jewellery Fair and the International Gift Show. I believe that we now have the needed opening to enhance Japan-Sri Lanka investment collaboration further as many new investment opportunities in Sri Lanka have opened for Japanese investors.

Takahashi addressing Bathiudeen said that Sri Lanka-Japan trade relations were historic. Minister Bathiudeen s information on Sri Lanka s new growth and development phase is important and interesting. I also encourage more Sri Lankan trade delegations to Tokyo. Business to business exchanges with Japan can play a key role in improving Sri Lankan trade with us. I believe such exchanges can strengthen our overall bilateral cooperation significantly.

Minister Bathiudeen also emphasised on the need for vigorous promotional efforts in Japan for Sri Lanka s products, especially apparels, ceramics, gem and jewellery and rubber products. Japan is already aware of the quality of Sri Lankan products, Bathiudeen stressed.

Both Bathiudeen and Takahashi agreed that there was considerable future potential for further trade between the two countries, from the existing trade volumes.

Sri Lanka s total exports to Japan have also increased from US$ 141 m (in 2009) to US$ 169 m (in 2010). Imports of motor vehicles from Japan accounted for more than 50% of the value of total imports in 2010. Tea is the main export item to Japan from Sri Lanka amounting to 30% of total export value (to Japan) in 2010.

Since 2002 Sri Lanka s tea exports to Japan have increased by 163% and by 2010 the value stood at US$ 50 m. Other items of exports to Japan are shrimps and prawns, apparel and clothing, precious and semi-precious stones, natural rubber, machines parts and accessories, brooms, brushes, tyres, vegetables, fruit and nuts.

Sri Lanka s imports from Japan, which stood at US$ 224 m in 2009, increased to US$ 584 m in 2010. Other import items from Japan include electrical machinery, self-propelled bulldozers, iron or steel, parts and accessories of motor vehicles, etc.

There are already 60 Japanese enterprises operating in Sri Lanka under the BOI with a total investment of US$ 350 million, providing more than 12,000 people employment.

Speaking of the recent tsunami tragedy in Japan, Bathiudeen expressed his condolences to the Japanese Ambassador: Let me express my heartfelt condolences to all the victims of the Japanese tsunami tragedy. It was a great shock for us and we are aware of the gravity of the multiple disasters Japan faced as Sri Lanka too faced a similar situation in 2004.
Bathiudeen added: We are very proud of how Japan, as a nation, is overcoming the difficulties and I am sure that things will be restored to its glory in the near future. We will pray for the souls that perished in this tragedy and also for overall speedy recovery of Japan.